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Press Release

TD Holdings, Inc. Reports Second Quarter 2021 Financial Results

August 17, 2021 at 4:30 PM EDT

SHENZHEN, China, Aug. 17, 2021 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the second quarter ended June 30, 2021.

Affected by the ongoing outbreak of the COVID-19, the Company expected its used luxurious car leasing business to be subject to continuous losses due to the closure of stores. As a result, the Company sold the used luxurious car leasing business in August 2020 and focused on the commodities trading and its complementary businesses.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for the second quarter of fiscal year 2021. Despite the setbacks caused by the COVID-19 outbreak and having just started our commodities trading business in late 2019, our revenue increased by 2981% to $59.84 million for the second quarter of fiscal year 2021 as compared to the second quarter of fiscal year 2020. The growth figure demonstrates that we are optimally situated to capture the opportunities in the market. We remain focused on driving momentum in our business, and we recently announced that we plan to commence our commodity trading business in Yangpu Economic Development Zone and launch a blockchain payment and settlement platform for online commodity trading in Yangzhou Economic & Technological Development Zone in China. Looking forward, we will strengthen the Company's competitive position over the long-term, including developing our global commodity e-commerce platform, building our own digital cloud warehouse, improving our trading settlement and payment system, creating a supply chain financial ecosystem as well as acquiring large-scale overseas minerals. With the visibility and validation afforded as a Nasdaq listed company, we can now confidently focus on building profitable revenue growth and creating value for our shareholders."

Financial Highlights

In the quarter ended June 30, 2021

  • Total revenue was $59.84 million, consisting of $59.51 million from sales of commodities products, and $0.33 million from supply chain management services for the quarter ended June 30, 2021, an increase of 2981% from $1.94 million for the same quarter ended June 30, 2020.

  • Net income from continuing operation was $0.36 million, as compared with net loss from continuing operations of $5.17 million for the same quarter ended June 30, 2020. Net income was $0.36 million, as compared with net loss of $5.46 million for the same quarter ended June 30, 2020.

  • Basic and diluted earnings per share from continuing operations was nil, compared with basic and diluted loss per share from continuing operations of $0.11 for the same quarter ended June 30, 2020.

In the six months ended June 30, 2021

  • Total revenue was $89.42 million, consisting of $88.95 million from sales of commodities products, and $0.47 million from supply chain management services for the six months ended June 30, 2021, an increase of 2740% from $3.15 million for the same period ended June 30, 2020.

  • Net loss from continuing operation was $1.18 million, as compared with net loss from continuing operations of $5.26 million for the same period ended June 30, 2020. Net loss was $1.18 million, as compared with net loss of $5.82 million for the same period ended June 30, 2020.

  • Basic and diluted loss per share from continuing operations was $0.01, compared with basic and diluted loss per share from continuing operations of $0.17 for the same period ended June 30, 2020.

Financial Results

In the three months ended June 30, 2021

Revenues

For the three months ended June 30, 2021, the Company sold non-ferrous metals to two customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $59.51 million from sales of commodity products for the three months ended June 30, 2021, among which, $1.52 million generated from the related party, compared with $1.56 million from sales of commodity products for the three months ended June 30, 2020.

For the three months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.33 million from eight third party customers, compared with $0.35 million from two third party customers and $0.03 million from one related party customer for the three months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the three months ended June 30, 2021, the Company purchased non-ferrous metal products of $57.93 million from fifteen third party vendors and $1.53 million from five related party vendors, compared with $1.37 million from one third party vendor and $0.20 million from one related party vendor for the three months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $1.61 million or 368%, to $2.05 million for the three months ended June 30, 2021, from $0.44 million for the three months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.01 million and, 2) amortization of convertible notes of $0.12 million for the three months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $1.14 million or 63%, to $2.94 million for the three months ended June 30, 2021, from $1.80 million for the three months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $2.01 million was attributed to relate party and $0.94 million was generated from third party vendors.

Amortization of relative fair value of warrants relating to service provider  

For the three months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the three months ended June 30, 2021, no such expenses incurred.

Net income from continuing operations

Net income was $0.36 million for the three months ended June 30, 2021, compared with net loss of $5.17 million for the three months ended June 30, 2020.

Net loss from discontinued operations

During the three months ended June 30, 2020, net loss from discontinued operations was $0.29 million from discontinued operations of used luxurious car leasing business.

In the six months ended June 30, 2021

Revenues

For the six months ended June 30, 2021, the Company sold non-ferrous metals to two related party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $88.95 million from sales of commodity products for the six months ended June 30, 2021, compared with $2.62 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.47 million from third party vendors, compared with commission fees of $0.46 million from three third party customers and distribution service fees of $0.07 million from one related party customer for the six months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the six months ended June 30, 2021, the Company purchased non-ferrous metal products of $67.68 million from fifteen third party vendors and $21.20 million from five related party vendors, compared with $1.36 million from on third party vendor and $1.26 million from one related party vendor for the six months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $2.88 million or 389%, to $3.62 million for the six months ended June 30, 2021, from $0.74 million for the six months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.89 million and, 2) amortization of convertible notes of $0.16 million for the six months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020, 3) professional fee increased from $0.51 million to $0.77 million

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.16 million or 168%, to $5.04 million for the six months ended June 30, 2021, from $1.88 million for the six months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $3.62 million was attributed to relate party and $1.42 million was generated from third party vendors.

Share-based payment for service

On March 4, 2021, the Company issued 750,000 fully-vested warrants with an exercise price of $0.01, with a five-year life, to an agent who was engaged to complete the warrant waiver and exercise agreements. The Company applied Black-Scholes model and determined the fair value of the warrants to be $ $1,695,042. Significant estimates and assumptions used included stock price on March 4, 2021 of $2.27 per share, risk-free interest rate of one year of 0.08%, life of 5 years, and volatility of 71.57% for the six months ended June 30, 2021.

For the six months ended June 30, 2020, no such expenses incurred.

Amortization of beneficial conversion feature and relative fair value of warrants relating to issuance of convertible notes  

For the six months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the six months ended June 30, 2021, no such expenses incurred.

Net loss from continuing operations

Net loss was $1.18 million for the six months ended June 30, 2021, compared with net loss of $5.26 million for the six months ended June 30, 2020.

Net loss from discontinued operations

During the six months ended June 30, 2020, net loss from discontinued operations was $0.55 million from discontinued operations of used luxurious car leasing business.

Six Months Ended June 30, 2021 Cash Flows

As of June 30, 2021, the Company had cash and cash equivalents of $6.90 million, as compared with $2.70 million as of December 31, 2020.

Net cash used in operating activities from continuing operations was $3.79 million for the six months ended June 30, 2021, compared with $2.74 million for the six months ended June 30, 2020. Net cash used in operating activities was $3.79 million for the six months ended June 30, 2021, compared with $2.72 million for the six months ended June 30, 2020.

Net cash used in investing activities was $15.81 million for the six months ended June 30, 2021, 2020, compared with $78.86 million for the six months ended June 30, 2020.

Net cash provided by financing activities was $23.10 million for the six months ended June 30, 2021, compared with $80.24 million the six months ended June 30, 2020.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in commodity trading business and supply chain service business in China. Its commodities trading business primarily involves purchasing non-ferrous metal product from upstream metal and mineral suppliers and then selling to downstream customers. Its supply chain service business primarily has served as a one-stop commodity supply chain service and digital intelligence supply chain platform integrating upstream and downstream enterprises, warehouses, logistics, information, and futures trading. For more information, please visit http://ir.tdglg.com.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of TD Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the Company's operations, the demand for the Company's products and services, global supply chains and economic activity in general. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For more information, please contact:

Ascent Investor Relations LLC
Ms. Tina Xiao
Email:tina.xiao@ascent-ir.com 
Tel: +1 917 609 0333

 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS




June 30,
2021



December 31,
2020


ASSETS







Current Assets







Cash


$

6,896,515



$

2,700,013


Accounts receivable, net



2,523




-


Loans receivable from third parties



59,504,874




18,432,691


Prepayments



5,115,092




-


Due from related parties



20,366,043




55,839,045


Inventory



883,961




-


Other current assets



728,738




1,310,562


Total current assets



93,497,746




78,282,311











Property and equipment, net



2,205




-


Goodwill



70,088,377




69,322,325


Intangible assets



22,999,116




19,573,846


Total noncurrent assets



93,089,698




88,896,171











Total Assets


$

186,587,444



$

167,178,482











LIABILITIES AND EQUITY









Current Liabilities









Accounts payable


$

2,301,057



$

-


Advances from customers



10,995,818




9,214,369


Third party loan payables



1,996,533




-


Due to related parties



1,349,180




7,346,021


Bank borrowings



1,300,068




1,653,247


Income tax payable



6,703,087




5,460,631


Convertible notes



5,219,360




-


Acquisition payable



-




15,384,380


Other current liabilities



2,930,193




3,197,147


Total Current Liabilities



32,795,296




42,255,795











Deferred tax liabilities



4,535,242




4,893,461


Total Non-current Liabilities



4,535,242




4,893,461











Total Liabilities



37,330,538




47,149,256











Commitments and Contingencies (Note 12)


















Equity









Common stock (par value $0.001 per share, 100,000,000 shares authorized;
97,043,566  and 79,131,207 shares issued and outstanding at  June 30, 2021
and December 31, 2020, respectively)



97,044




79,131


Additional paid-in capital



181,174,696




151,407,253


Statutory reserve



913,292




913,292


Accumulated deficit



(41,876,191)




(39,255,945)


Accumulated other comprehensive loss



8,948,065




6,885,495


Total Equity



149,256,906




120,029,226











Total Liabilities and Equity


$

186,587,444



$

167,178,482


 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars, except for the number of shares)




For the Three Months Ended
June 30,



For the Six Months Ended
June 30,




2021



2020



2021



2020















Revenues













- Sales of commodity products – related parties


$

1,523,616



$

1,563,669



$

21,926,631



$

2,617,301


- Sales of commodity products – third parties



57,989,381




-




67,022,848






- Supply chain management services – related parties







26,949








70,596


- Supply chain management services – third parties



326,650




351,793




472,425




460,630


Total Revenue



59,839,647




1,942,411




89,421,904




3,148,527



















Cost of revenue

















- Commodity product sales-related parties



(1,531,336)




(1,369,669)




(21,917,517)




(1,256,218)


- Commodity product sales-third parties



(57,932,603)




(200,679)




(66,965,015)




(1,369,669)


- Supply chain management services – related parties



-




-




-






- Supply chain management services – third parties



(2,592)




(7,633)




(3,642)




(7,954)


Total cost of revenue



(59,466,531)




(1,577,981)




(88,886,174)




(2,633,841)



















Gross profit



373,116




364,430




535,730




514,686



















Operating expenses

















Selling, general, and administrative expenses



(2,054,354)




(439,128)




(3,624,733)




(740,825)


Total operating cost and expenses



(2,054,354)




(439,128)




(3,624,733)




(740,825)



















Other income (expenses), net

















Interest income



2,946,236




1,804,743




5,045,093




1,884,923


Interest expenses



(155,825)




(31,610)




(283,248)




(54,480)


Share-based payment for service



-




-




(1,695,042)




-


Amortization of beneficial conversion feature relating to
issuance of convertible notes



-




(3,400,000)




-




(3,400,000)


Amortization of relative fair value of warrants relating to issuance of convertible notes



-




(3,060,000)




-




(3,060,000)


Other income (expense), net



(379,924)




-




(386,358)




-


Total other income (expenses), net



2,410,487




(4,686,867)




2,680,445




(4,629,557)



















Net income (loss) from continuing operations before income taxes



729,249




(4,761,565)




(408,558)




(4,855,696)



















Income tax expenses



(371,393)




(408,829)




(771,862)




(408,829)



















Net income (loss) from continued operations, net of tax



357,856




(5,170,394)




(1,180,420)




(5,264,525)



















Net loss from discontinued operations, net of tax



-




(292,091)




-




(552,445)



















Net income (loss)



357,856




(5,462,485)




(1,180,420)




(5,816,970)


Less: Net loss attributable to non-controlling interests



-




2,804




-




7,073


Net income (loss) attributable to TD Holdings, Inc.'s Stockholders


$

357,856




(5,459,681)




(1,180,420)




(5,809,897)



















Comprehensive Income (Loss)

















Net income (loss)


$

357,856




(5,462,485)




(1,180,420)




(5,816,970)


Foreign currency translation adjustment



2,706,148




(85,670)




2,062,570




(87,972)


Comprehensive income (loss)



3,064,004




(5,548,155)




882,150




(5,904,942)


Less: Total comprehensive income - attributable to non-controlling interests



-




2,804




-




7,073


Comprehensive income (loss) attributable to TD Holdings, Inc.


$

3,064,064




(5,545,351)




882,150




(5,897,869)



















Income (Loss) per share - basic and diluted

















Continuing Operation- Income (loss) per share – Basic and diluted



(0.00)




(0.11)




(0.01)




(0.17)


Continuing Operation- Income (loss) per share – Diluted



(0.00)




-




-




-


Discontinuing Operation-Net loss per share –Basic and diluted


$

-




(0.01)




-




(0.02)



















Weighted Average Shares Outstanding-Basic



96,821,039




47,486,210




95,025,014




30,579,616



















Weighted Average Shares Outstanding- Diluted



102,312,155




-




-




-


 

 

TD HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollar)




For the Six Months Ended
June 30,




2021



2020


Cash Flows from Operating Activities:







Net loss


$

(1,180,420)




(5,816,970)


Less: Net income (loss) from discontinued operations



-




(552,445)


Net income (loss) from continuing operations



-




(5,264,525)


Adjustments to reconcile net income (loss) to net cash used in operating activities:









Amortization of intangible assets



1,895,871




-


Depreciation of fixed assets



130




-


Amortization of discount on convertible notes



163,333




-


Amortization of right of use assets



-




146,890


Amortization of beneficial conversion feature relating to issuance of convertible notes



-




3,400,000


Amortization of relative fair value of warrants relating to issuance of convertible notes



-




3,060,000


Share-based payment for service



1,695,042




-


Standstill fee relating to convertible notes



356,934




-


Interest expense for convertible notes



199,093




-


Deferred tax liabilities



(411,736)




-


Changes in operating assets and liabilities:









Other current assets



601,683




(138,596)


Account receivables



(2,520)




(1,927,299)


Inventory



(882,764)




-


Prepayments



(5,108,162)




(2,843,373)


Advances from customers



1,677,349




63,976


Accounts payable



2,297,940




-


Due to related parties



(5,518,273)




(300,549)


Due from related parties



(457,032)




-


Income tax payable



1,175,327




408,829


Other current liabilities



(297,177)




820,815


Lease liabilities



-




(166,242)


Net cash provided by (used in) operating activities from continuing operations



(3,789,382)




(2,740,074)


Net cash provided by operating activities from discontinued operations



-




19,213


Net cash provided by (used in) operating activities



(3,789,382)




(2,720,861)


Cash Flows from Investing Activities:









Purchases of intangible assets



(5,100,490)




-


Purchases of fixed assets



(2,332)




-


Final payment of acquisition of a subsidiary



(15,533,312)




-


Payment made on loan to related parties



(7,174,955)




-


Payment made on loans to third parties



(45,057,871)




(78,559,027)


Collection of loans from related parties



43,687,593




-


Collection of loans from third parties



13,370,395




-


Net cash used in investing activities from continuing operations



(15,810,972)




(78,559,027)


Net cash used in investing activities from discontinued operations



-




(300,711)


Net cash used in investing activities



(15,810,972)




(78,859,738)


Cash Flows from Financing Activities:









Proceeds from issuance of common stock under ATM transaction



2,192,989




-


Proceeds from issuance of common stock under private placement transactions



24,450,000




13,500,000


Proceeds from exercise of warrants



7,500




36,000,000


Proceeds from issuance of convertible promissory notes



4,500,000




30,000,000


Proceeds from borrowings from related parties







1,121,770


Proceeds from borrowings from third parties



1,993,828




-


Repayments  made on loans to related parties



(550,930)




-


Payments made on loans to third parties



(9,496,586)




-


Net cash provided by financing activities from continuing operations



23,096,801




80,621,770


Net cash used in financing activities from discontinuing operations



-




(381,554)


Net cash provided by financing activities



23,096,801




80,240,216


Effect of exchange rate changes on cash and cash equivalents



700,055




381,294


Net increase/(decrease)in cash and cash equivalents



4,196,502




(959,089)


Cash at beginning of period



2,700,013




2,446,683


Cash at end of period


$

6,896,515




1,487,594


Less: Cash from discontinued operations



-




84


Cash from continuing operations



6,896,515




1,487,510


Supplemental Cash Flow Information









Cash paid for interest expense



-




-


Cash paid for income tax


$

75,416



$

-


Supplemental disclosure of Non-cash investing and financing activities









Right-of-use assets obtained in exchange for operating lease obligations


$

-



$

455,635


Issuance of common stocks in connection with conversion of convertible notes


$

-



$

30,000,000


Issuance of common stocks in connection with private placements, net of issuance costs with proceeds collected in advance in November 2019


$

-



$

1,600,000


Issuance of common stocks in connection with warrant cashless exercise in March 2021


$

1,439,826



$

-


 

Cision View original content:https://www.prnewswire.com/news-releases/td-holdings-inc-reports-second-quarter-2021-financial-results-301357245.html

SOURCE TD Holdings, Inc.